Alaska Digest

JUNEAU - The city Water Utility will be starting mainline valve maintenance and flushing beginning Monday and continuing until the middle of June.

The utility said work will start in downtown Juneau, proceed to Bartlett Regional Hospital, then Douglas Island and eventually end in the Tee Harbor/Cohen Drive vicinity.

As mineral sediment is flushed from the lines, residents may experience discolored water. If this occurs, the agency suggested running cold water to help clear the line. Residents may also experience low water pressure while the city is in the area working.

Those with questions may call 780-6808.

Equipment accident idles Prudhoe plant

ANCHORAGE - Prudhoe Bay oil production is down about 90,000 barrels a day after an accident involving a piece of heavy equipment.

A side-boom crane used to handle pipe was in transit Monday when it hit an electric power line, said Daren Beaudo, spokesman for oil field operator BP. The accident caused a shutdown of a nearby processing plant called Gathering Center 2.

No one was hurt in the incident, Beaudo said.

The plant, which separates the raw stream from wells into oil, water and natural gas, already had been partially shut down last weekend for maintenance work.

Monday's accident brought it to a full stop, Beaudo said. BP decided to perform other needed maintenance work rather than partially restart the plant.

Beaudo said full production probably won't be restored until the weekend.

"We'll have a little bit longer outage, but we'll get a lot more work done and be able to avoid a future planned outage," he said Thursday.

BP operates Prudhoe Bay on behalf of itself and other owners including Exxon Mobil and ConocoPhillips. Prudhoe Bay normally produces about 400,000 barrels a day.

13 rescued from boat in Kachemak Bay

HOMER - Standing on the bow of the sinking Halibut Endeavor with 10 other shivering passengers and no ships in sight Wednesday afternoon, Matt North started dialing for help.

When the stern of the Endeavor started to disappear under the surface of Kachemak Bay, all the passengers moved to the bow. Some of the people took each other's hands and began to pray. Many were wet and shivering.

After a day of tagging halibut for the annual Homer Halibut Derby, boat captain Welden Chivers turned back toward the Homer Spit around 3:30 p.m. from the boat's fishing spot about five miles from Seldovia. As the 38-foot charter pressed forward through the calm, rolling waves of Kachemak Bay, the stern started taking on more water.

Forty-four minutes later, the Winter King and the Coast Guard Auxiliary arrived on scene, and the Coast Guard Auxiliary took off the passengers.

Minutes later, the boat rolled to its side. A passenger, the captain and deckhand took a dip in the chilly water before being lifted into the auxiliary boat.

Three minutes after rolling, the ship sank.

The rescued were transferred to the Coast Guard Cutter Roanoke Island. Several were treated and released by emergency medical personnel.

The cause of the sinking is not known. Boat owner Rick Zielenski had purchased the Endeavor this year, a longtime vessel of the Homer Harbor.

Alaska Air narrows first quarter loss

SEATTLE - Alaska Air Group said Thursday its first-quarter loss narrowed from a year ago, when the company incurred a hefty charge, but high fuel costs and stiffening competition on West Coast routes pose significant challenges.

Bill Ayer, chairman and chief executive of the Seattle-based parent company of Alaska Airlines and Horizon Air, said it will be forced to keep ticket prices low to attract customers.

Despite signs of flattening demand in some markets, Ayer said he expects results to improve later this year as the company works to defend its turf.

"Although a lot can change as the year plays out, our forecast still has us on track for improved profitability for the full year in spite of the current quarter's results," Ayer said in a conference call with analysts.

For the quarter ended March 31, Alaska Air said its loss narrowed to $10.3 million, or 26 cents per share, from a loss of $79.1 million, or $2.36 per share, during the same period last year.

Excluding adjustments for fuel hedging and first-quarter 2006 costs stemming from the retirement of Alaska Airlines' MD-80 fleet, the company reported a loss of $15.8 million, or 39 cents per share, compared with a profit of $2.8 million, or 8 cents per share, in the same period a year ago.

Analysts polled by Thomson Financial forecast a loss of 32 cents per share in the most recent quarter. Thomson estimates usually exclude special items.

Revenue grew 3 percent to $759.4 million from $735.4 million last year. Analysts expected revenue of $767.9 million.

Occupancy of Alaska Airlines planes was down in the quarter, as traffic fell slightly, while the airline increased the number of flights. Horizon Air saw traffic grow, but not enough to fill the increased number of seats available.

Mat Maid dairy looks for a way to stay alive

PALMER - The Matanuska Maid dairy is struggling and could be shut down by the end of the year, according to the Alaska Board of Agriculture and Conservation.

The board asked the state this week for $600,000 to help the state-owned dairy stay in business.

Members of the board said the money is needed because of more than $700,000 in company losses the past two years and to fund an independent review to find a way to make the dairy profitable.

The board oversees the state Agricultural Revolving Loan Fund, the sole shareholder in Mat Maid dairy.

Local and national trends, from rising fuel costs and new federal Homeland Security requirements to competition from lower-cost Outside milk brands, have cut into company sales and increased expenses in recent years.

Board chairwoman Rhonda Boyles said the $600,000 could help the company cover operating expenses while officials try to find a "silver bullet" to reverse the losses.

Without a solution, the state would first try to sell rather than close the dairy, Boyles said. Closing the dairy would be a blow to Alaska's few remaining dairy farms, which rely on Mat Maid to purchase their milk.